Launderers Cash In Despite Bank Laws, Witness Tells Congress

April 17, 1986|By United Press International

WASHINGTON — A money launderer told Congress on Wednesday how he easily evaded a federal law requiring banks to report cash transactions of more than $10,000 by buying $9,000 cashier's checks at dozens of Los Angeles and Miami banks.

Testifying before a House banking subcommittee, Herbert Friedberg said no one questioned his cash purchases of $200,000 worth of the $9,000 checks in just two days at banks along Los Angeles' chic Wilshire Boulevard.

Friedberg, a 53-year-old unemployed property manager, later cooperated with the FBI in an investigation of a Miami money laundering operation.

He told the panel he met Jacques Behar, a Colombian, while managing a Miami condominium where Behar owned a $350,000 apartment.

After losing his job because of a back injury, Friedberg said, he was asked by Behar to buy cashier's checks for him at a Miami bank in December of 1983, which soon led to his doing so on a regular basis in 1984.

The checks, he said, were made out to ''Latin-sounding names'' and used fictitious names for the purchaser -- a practice Friedberg said he did not find suspicious because Behar was in the ''import-export business.''

''We never used the term laundering, and at that time I did not know we were doing anything illegal,'' he said.

Later Behar sent him to Palos Verde, Calif., to pick up cash from a man he knew only as ''Hecho'' and to buy cashier's checks at Los Angeles area banks. Friedberg said he became curious when he picked up $200,000 at a ''palatial residence'' overlooking the Pacific furnished only with mattresses on the floor and sheets covering the windows.

He said he used the money to buy $9,000 cashier's checks at about a dozen banks along Wilshire Boulevard with no questions asked.

On his return to Miami, he read a newspaper article on money laundering and realized he was acting illegally. ''I was educated by The Miami Herald,'' he said.

The article prompted him to contact the FBI and the Internal Revenue Service and to work undercover.

Although he was never told the source of the large sums of money he and others laundered for a 1 percent commission, Friedberg said Behar sometimes joked that $5 and $10 bills were ''marijuana money'' and that larger bills were ''cocaine money.''